Stout provided buy-side financial due diligence services for a private equity-backed nationwide HVAC and building controls commercial installation and maintenance service provider. The acquisition target was an installation and service provider in the mid-Atlantic region that expanded the company’s geographical footprint and service offering.

Our Financial Due Diligence (FDD) team performed a quality-of-earnings, net working capital, and net debt analysis while working closely with our client to confirm its initial valuation and supporting the closing of the transaction. Our FDD team focused on normalized EBITDA, including a percentage of completion lookback / hindsight normalization, historical job performance by service type (including job size and job profitability trends), historical versus current backlog benchmarking, and headcount / employee compensation cost structure.

Additionally, we assisted with the development of the working capital target and closing working capital exhibits, as well as reviewed the purchase agreement and provided feedback on key financial terms.